The recent need for more and higher value crops along with developmental pressures have pushed agricultural land values to record highs. This holds for farm real estate, pastureland, and cropland.
The National Agricultural Services (NASS) Land Values 2023 Summary released in August 2023 reported that the average farm real estate value (all land and buildings on farms) averaged $4,080 per acre, up $280 per acre (7.4%) from 2022. U.S. cropland value averaged $5,460 per acre, an increase of $410 per acre (8.1%) from 2022. Pasture value averaged $1,760 per acre, which is an increase of $110 (6.7%) from the previous year.
Key Takeaways:
U.S. agricultural land values are at record highs, driven by demand for valuable crops and development pressures.
Farm real estate, cropland, and pastureland values have increased significantly from 2022.
Location, precipitation, soil quality, and access to water are key factors affecting farmland value.
The Corn Belt and Pacific regions have the highest farmland and cropland values, respectively.
LandGate provides tools and resources to optimize farmland sales, including free property reports.
Which factors affect the value of farmland?
The value of farmland across the U.S. fluctuates, and it varies greatly state-by-state. Here are some of the main factors that affect the value of farmland:
Location
The most valuable agricultural land is found in states with little land remaining for development.
Precipitation
Precipitation plays an important role in the value of agricultural land. Extended droughts that have impacted 60% of the U.S. have reduced the quantity of grazeable pastureland, increasing demand and driving up prices in regions with more precipitation,such as the South and Mid-south.
Soil
The soil on any given tract greatly affects the productivity of the property in terms of growing crops.
Access to water
When it comes to selling land for agricultural purposes, access to water and irrigation systems are important factors that affects the value of land.
Regional Factors
Regional factors that affect the value of agricultural land include general economic conditions, farm economic conditions, government policy, and local geographic conditions.
Economics
During periods of high inflation, the values for hard assets, such as land, tend to increase due to safer returns. Similarly, competing land-use interests (urban and suburban sprawl) have played a role in rising land values across the country.
Where in the United States is Farmland the Most Valuable?
Location and availability plays the largest role in determining the value of agricultural land across the United States. For example, Rhode Island has a limited amount of undeveloped/ agricultural land available, so the value of agricultural land in Rhode Island is extremely high (averaging $18,300 per acre in 2023). Conversely, the most affordable agricultural land can be found in states with a greater supply available. Agricultural land in New Mexico is currently the most affordable at an average price of $610 per acre.
Farmland real estate value trends vary by region. Farmland in the Corn Belt (Illinois, Indiana, Iowa, Ohio, Missouri) is worth significantly more compared to other regions. For example, the average value for farmland in the Corn Belt was $8,100 in 2023, whereas the average value for farmland in the Mountain region (Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, and Wyoming) averaged $1,450.
Similarly, cropland values vary by region. Cropland in the Pacific region averages $8,800 per acre in 2023, but in the Mountain region, cropland averages just $2,410 per acre.
For Pastureland, it is the most valuable in the Southern region (Florida, Alabama, Georgia, and South Carolina), averaging $5,050 per acre in 2023. Pastureland in the Mountain region averaged just $808 per acre in 2023.
What is the Best Way to Sell Farmland?
Selling farmland to get the most value from your property involves a strategic approach and the consideration of various factors.
Enter into a competitive marketplace/ making a listing
Market & share your listing with your network.
Consider entering into an auction or working with a local land broker in addition to listing to get more eyes on the land.
Market your land appropriately based on its value points. For example, a farm that has a large barn with stalls or round pens suitable for boarding or training horses should be marketed to appeal to equine enthusiasts.
Showcase the land’s potential
Highlight your agricultural land’s potential for crop production or other uses, such as livestock grazing or hunting.
Providing information on soil types and soil quality, water resources, and any existing infrastructure can help potential buyers see the value in your land.
Prepare a Comprehensive Report for your Property
Do your due diligence to get a full view of your land and the value of its natural resources. LandGate’s property report has this information, and using the property report ensures you can easily identify low-ball offers.
Can LandGate Help me Sell Farmland?
Agricultural land is an extremely valuable asset in the United States, and with the right approach, you can sell your land for the most profit. Understanding the market, showcasing your land's potential, and understanding the unique features on your property are all key factors in achieving a successful sale.
Generate your free property report from LandGate to learn more about your land and its unique assets can help you to get the most value from a sale. Our value index scores provide you with an estimated land value along with insights into hidden opportunities to monetize your property. From there, entering your property into a competitive marketplace will show you exactly what buyers are willing to pay for your land. LandGate's no-fee and commission-free marketplace is a great place to start!
